What Happened?

Some insurers backed by private equity may have a thinner financial cushion if they run into trouble, a new Congressional Research Service (CRS) report says. Private equity firms now own 139 U.S. insurers, up from about 25 in 2017; in 2024, those insurers held about $700 billion in assets, or roughly 7.8% of the industry's total. [](#ngr-97c2f06c-9fde-4289-b15a-0ff8224a9094)

The CRS report says these insurers often invest differently from traditional insurers: they hold more hard-to-sell private assets, invest in companies linked to their owners, and use offshore arrangements governed by different rules.

Why Does it Matter to Me?

Some insurers backed by private equity had 11% to 37% of their investments in assets linked to their parent companies, compared with 7% across the industry.

Private credit ratings covered 22% to 38% of PE-backed insurers' bond portfolios, compared with 12% nationally; the report says these ratings consistently make the bonds look less risky than they are, reducing the reserves insurers are required to hold. That leaves insurers with a smaller financial cushion if they get into trouble.

Both Sides, Now

The CRS report highlights a basic problem: each state regulates insurers, and there is no federal regulator like those that oversee banks or financial markets, even as risks in these investments grow more complex and widespread.

The report raises two possibilities: creating a federal insurance regulator or improving coordination among federal agencies, with FSOC and the SEC among those that could play a role. The report doesn't say whether more federal oversight is needed; it leaves that question open for Congress and the Trump administration. The NAIC can create model rules, but they have no legal force unless states adopt them.

What Happens Next?

Whether FSOC, the SEC, or a new federal agency takes on a bigger role will depend on decisions still to be made by Congress and the Trump administration. So far, no legislation has been introduced and no vote is scheduled.

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